Ten Home Insurance Myths Coloradans Should Know

Colorado · The form, not the rumor

These ten ideas get repeated at closings. None of them is how a Colorado homeowners policy pays.

1. Flood is not in an HO-3. Outside water is a flood policy, in a mapped zone or outside one.
2. A FEMA zone is a map, not coverage. Being outside a high-risk zone does not add flood to the homeowners form.
3. Coverage A is rebuild cost, not the sale price. Land is not insured. Colorado sets no homeowners dollar minimum.
4. The “80% rule” is a common policy condition for replacement cost on the dwelling. It is not CRS 10-4-110.8, and the state does not pay the other 20%.
5. Actual cash value is replacement cost minus depreciation. They are not the same check.
6. A percentage hail deductible is a percent of Coverage A. Two percent of $450,000 is $9,000. That is an example, not a percent of the repair.
7. A new roof does not shrink that percent. It can change eligibility or whether the roof pays replacement cost.
8. A wildfire that burns the house is commonly a fire peril. A carrier can still decline or nonrenew in a wildland area. Appetite is not the same as an excluded fire.
9. The association’s master policy does not insure your furniture or your liability. That is the HO-6, if you bought one.
10. Escrow pays the bill the servicer was sent. It does not choose Coverage A. An umbrella does not rebuild the house.

CRS 10-4-110.8 deals with replacement-value estimates, additional living expense, policy copies, contents, inventories, and some wildfire total-loss duties. Read it for those duties, not for a coinsurance split. The Insurance Information Institute’s 2022 HO-3 average for Colorado was about $2,079. An average is not a quote, and shopping quotes does not raise the rate. A lapse does.

The policy: Colorado homeowners. Hail: house versus car. Fire: wildfire and the coverage page. Water: flood. Valuation: replacement cost and actual cash value, written for Texas. Price changes without a promised percent off: what a renewal can do.